Options and pre-emption rights

Practice notes

SDLT—options and rights of pre-emption

This Practice Note looks at the way that options and pre-emption agreements over UK land are treated for stamp duty land tax (SDLT) purposes. Options...

15th Jan

Practice notes

Property deeds—valid execution by individuals

To be a deed, an instrument must be validly executed:•by the person executing it or a person authorised to execute it in the name of or on behalf of...

15th Jan

Practice notes

Call options—exercising the option

Option agreements are strictly construed and the option may be lost if the option holder does not exercise it correctly.An option agreement is a...

15th Jan

Practice notes

Option agreements—the need for a long-stop date

Call options are frequently used by developers to secure a right to buy land if planning permission is obtained. Taking an option provides the...

15th Jan

Practice notes

Call options—protection against third parties

A call option is (generally) an equitable interest in land and must be protected by registration in order to bind the grantor’s successors in title....

15th Jan

Practice notes

Offer back clauses

Offer back (sometimes known as surrender back) clauses oblige the tenant to offer to surrender the lease to the landlord as a pre-condition to the...

15th Jan

Practice notes

Options—extending time for exercise

Unless the option agreement or contract specifically allows for extensions of time, the time limit must be strictly adhered to. It cannot be extended...

15th Jan

Practice notes

What are the signature requirements for property contracts?

Law of Property (Miscellaneous Provisions) Act 1989A contract for the sale or other disposition of land, or of any interest in land, is void unless it...

15th Jan

Q&As

What is the position if an option agreement is silent on whether it is binding on successors-in-title except for one mentioned in the reservation of rights clauses where express rights are reserved for the benefit of 'the vendor and its successors-in-title'?

The starting point is to note that, when the land to which the option agreement relates is sold, the burden of positive covenants contained in the...

Produced in partnership with Kate Andrews of Hamlins 8th Jan

Q&As

In respect of a pre-emption agreement, is there a legal limit on the ‘pre-emption period’, ie the time within which the pre-emption agreement will be legally enforceable? Does the statutory perpetuity period apply to pre-emption agreements that run from the present?

A pre-emption agreement is a right to purchase something (usually land or shares) before the asset is sold to a third party. The right is contractual...

Produced in partnership with Chris Bryden of 4 King’s Bench Walk 8th Jan

Q&As

If an option agreement has expired, can it still be extended by agreement from both parties?

For the purposes of this Q&A we have assumed that the option in the question is an agreement made between a landowner and a potential purchaser of...

Produced in partnership with Georgia Whiting of 4 King’s Bench Walk 8th Jan

Q&As

When serving an option to purchase notice on landlords (who are trustees of a trust of land), two of whom have died, should the notice be served on the executors of the deceased landlords/trustees as well as the surviving trustees?

It is worth noting that the maximum number of trustees of land permitted by statute is four (section 34(2) of the Trustee Act 1925 and section 34(2)...

Produced in partnership with Oliver Auld of Charles Russell Speechlys LLP 8th Jan

Q&As

If a lease does not appear to be correctly executed, but it has been registered at HM Land Registry, what is the legal effect of the document, and what are the implications for any potential assignee of the lease?

Case study:A lease was completed several years ago, but the lease bears only one signature on behalf of the original tenant (in breach of the...

Produced in partnership with Elizabeth England of 42 Bedford Row 8th Jan

Q&As

If the transfer of a piece of land by a local authority in 1986 contained provisions for the purchaser to offer the property back to the local authority with the offer to repurchase to be open for a period of four months and the purchaser sells the property to a third party, failing to comply with these provisions what is the effect on the second transfer? Does the Perpetuities and Accumulations Act 1964 come into force?

Please see related Q&A: If an overage provision within a deed executed in 1985 does not contain an overage period, is it still enforceable/valid?Three...

Produced in partnership with Desmond Kilcoyne 8th Jan

Q&As

What are the implications if an original party (the buyer) to an option agreement conditional upon planning obtains the planning permission, and in the time between obtaining the planning and exercising the option, assigns the benefit of the option to another buyer for an option fee that is equivalent to the uplift on the land due to it having the benefit of the planning?

In this query, a person, usually a developer, wishes to buy land for development but is concerned that planning permission may not be forthcoming. The...

Produced in partnership with Helen Galley of XXIV Old Buildings 8th Jan

Precedents

Put and call option—fixed price or market value incorporating the Standard Commercial Property Conditions (Third Edition—2018 Revision)

date [date]Parties1[name of Seller] [of OR incorporated in England and Wales with company registration number [number] whose registered office is at]...

6th Jan

Precedents

Landowner call option where planning is being obtained by the buyer—market value incorporating the Standard Commercial Property Conditions (Third Edition)

date [date]Parties1[name of Seller] [of OR incorporated in England and Wales with company registration number [number] whose registered address is at]...

6th Jan

Precedents

Put option—fixed price or market value incorporating the Standard Commercial Property Conditions (Third Edition)

date [date]Parties1[name of Seller] [of OR incorporated in England and Wales with company registration number [number] whose registered office is at]...

5th Jan

Precedents

Call option for a lease of whole—fixed price plus indexation incorporating the Standard Commercial Property Conditions (Third Edition)

date [date]Parties1[name of Seller] [of OR incorporated in England and Wales with company registration number [number] whose registered office address...

4th Jan

Precedents

Developer call option where planning is being obtained by the buyer—fixed price incorporating the Standard Commercial Property Conditions (Third Edition)

date [date]Parties1[name of Seller] [of OR incorporated in England and Wales with company registration number [number] whose registered address is at]...

4th Jan

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